School-by-School vs. System Reform: Why Business Leaders Need to Go Back to the Future

Do you remember the 1980s, when the United States spawned a whole new breed of education governors, people like Bill Clinton, Lamar Alexander, Jim Hunt, Tom Kean, Terry Branstad and Richard Riley? These men made education the heart and soul of their term in office. Many continued when they left office, Hunt, for example, chairing the National Board for Professional Teaching Standards, Branstad running a university and Alexander becoming Secretary of Education, as did Riley.

Most of the new education governors were well-educated southerners. All were determined to lead their states to rapid economic growth and they knew that they would need to persuade the nation’s industrial leaders that their states could offer a world-class education to their workers and their families. They also knew they would have to greatly improve their education systems to pull that off.

They could not have done it without the strong support of the corporations they were trying to attract. They were able to get that corporate support because the heads of many American corporations were getting much more exposure to the global economy than they had ever had before. That exposure was chilling. The competition from Japan and the five “tiger” economies of Asia was posing a threat to the very existence of many American manufacturing companies and many did not survive. It was quickly apparent to many of these executives that one of the most important advantages their competitors were bringing to the table was the ability of their education systems to produce a palpably superior work force. Governors and industrial leaders made common cause.

Corporate leaders like Frank Shrontz at Boeing, David Kearns at Xerox and Lou Gerstner at IBM famously became leaders as well in the effort to reform American schools. When David Kearns left Xerox, he accepted a request from Lamar Alexander to join him at the helm of the U.S. Department of Education, and, while there, persuaded the Business Roundtable to create New American Schools, a new organization sponsored by some of the most powerful corporations in the United States, for the purpose of funding the development of new, creative designs for America’s public schools. One of the other partnerships of that era was Achieve, an organization put together by top business executives and the governors, to conduct an annual education summit that laid claim to leadership of the whole national education reform effort. Presidents of the United States, invited to the annual Achieve summit, made it their business to attend. It was natural for top corporate heads to join forces with the education governors to build a national agenda for education reform. They saw the world in much the same way.

Do you remember those days? Well, they are gone. Over the last 30 years, the dominant American firms have gone global. Thirty years ago, they weighed in on American education policy because they were scared to death that they would be unable to compete because they would not be able to hire a competitive work force. Now, they care as much as ever about getting a competitive work force, but they have learned that they can find the people they need at whatever skill level they require all over the globe, and often in greater quantity and at less cost than they can get them in the United States. If they can’t get what they need for their research and development labs or their distribution centers or their factories here in the United States, they can get them in Singapore or India or China or Hungary.

No less important, they and their successors have given up on changing the American education system. Too hard, much harder than they had thought it would be. And now they know they don’t have to. They can go anywhere they need to on the face of the earth for their employees. So they no longer have a strong incentive to play a very important role in the national education debate.

There are many fewer people who claim the title “education governor” now. Governors are not generally suicidal. If they are going to take on the reform of a very large and very complex institution like public education, they know they need allies. Without such allies, the job is appallingly difficult. Better to take on some other issue that is doable, for which there are some natural partners.

This does not mean, however, that American business is no longer a factor in American education reform. It most certainly is, but in a very different way, and with very different consequences.

Frank Shrontz, Lou Gerstner and David Kearns have been replaced by business leaders from the senior ranks of hedge funds, venture capital and private equity firms, and the kinds of entrepreneurial enterprises they fund. They tend to be deep believers in “disruptive change.” They typically distrust government and the “system,” and adopt a rather libertarian outlook. Rather than work within the education system, they tend to support people and entities that work outside the system or work hard to challenge it. They distrust education professionals and prefer instead to trust young, bright, well-educated people who are willing to take the system on. In short, they identify with and give their support to people like themselves. They are big backers of individual charter management organizations and of policies that would strengthen charter schools, which they see as taking on the system. It is very doubtful whether the charter school movement would have gotten away from the starting gate without these deep pocketed, very committed supporters.

The difference between the new business supporters of education reform and those they replaced is very important. Frank Shrontz, David Kearns and Lou Gerstner thought strategically about education reform. Shrontz ran a firm making advanced aircraft from components fabricated all over the world. Kearns’ challenge at Xerox was to restructure a very large firm for much higher performance in very difficult circumstances. Gerstner inherited a larger firm in even more dire straights and he, too, had no alternative but to restructure an older, larger and more encrusted firm to get much higher, leaner performance. None of these men had the luxury of building a brand new firm free of traditions, bureaucracy and large internal vested interests. None of them could indulge in trying to revive their firms by creating a “skunk works” off in a corner that would save the firm with disruptive changes from left field.

For them, changing the schools meant changing the system, not going around it. Kearns pointed out that, “…in the restructuring of giants like Motorola, Ford and Xerox lay critical lessons for education.” “Don’t forget,” he said, “that we are not trying to eliminate the public system. We are trying to make it better.”

Gerstner was a management consultant to very large firms before he was asked to head RJR Nabisco and then IBM. His background made it natural for him to think about how to change the culture and incentives in large organizations in order to produce much higher quality at lower cost. In his work on education reform, he ended up focusing on the quality of the teaching work force, because he knew from his own experience that no organization is any better than the quality of its work force, and, he thought about the schools problem not as fixing schools one by one, but in terms of the strategic moves that could improve the entire system.

But their successors were not from giant firms like Boeing, IBM, Xerox, Motorola and Ford. They come from start-ups and the investment firms that finance them. They think of themselves as upstarts from outside the system challenging the big, well-established companies. None had to deal with the dead weight that comes with such firms. They are used to being nimble and have instinctive distrust of the people who make the rules they have to live by, especially government. So they were attracted to charters like bears to honey, because charters were presented as a way to go around the system, to leave its dead weight behind, while at the same time making it possible to attract the very kind of people whose work they would like to support. That was fine with them, because they were not out to change the system, except to the extent that was necessary to give their chosen entrepreneurs, the charter school operators and other educational entrepreneurs, room for maneuver.

Ever since I was elected to a school board in Massachusetts and discovered that my constituents did not have the right to choose which of our four elementary schools they could send their children to, I have been an advocate of choice in our public schools. I am a proud member of the board of BASIS DC, a charter in Washington, DC that I think is likely to make a big difference in the lives of the students it enrolls. But there is no evidence that charter schools as a whole improve student achievement in the United States any more than regular public schools do, once the background of the students attending them is taken into account. I regard my service on the board of BASIS DC as a way to give something of myself back to the community and help the small number of students this school will serve. I do not regard it as an investment that will help the students in the United States as a whole overtake the students in the countries with top achievement.

I do not doubt the commitment of this new group of business executives with an interest in education reform. But I have grave doubts that they will make much difference in the history of American education or, for that matter, for a significant number of American school children. Investing in particular charter schools or in Teach for America or New Leaders for New Schools is something that these business leaders can be justifiably proud of, but it won’t make much of a difference with respect to the huge challenge we face in educating the great majority of our students to a world-class standard.

Frank Shrontz, David Kearns, Lou Gerstner, and their generation of business leaders, had it right. If one is serious about addressing the underlying problems on the scale needed to make a difference for the vast majority of American school children, then one has to change the system charged with their education, however difficult that may be.

That is a challenge that the best of our politicians cannot take on without allies. Their natural allies are in the business community, now as they were earlier. It is still the case, even in the backwash of the second-worst recession in a century, that good jobs are going begging because employers cannot find the people with the skills and knowledge they need to fill them. Craig Barrett, the retired chairman of Intel, may continue to play an important national role in education reform in part because he thinks it will help Intel in its quest for world class talent, but I suspect that his primary motivation is that he cares about his country. I very much hope that, as the new generation of business leaders that has provided so much support to charters and other entrepreneurial efforts in education take pride in their successes, they also recognize the limitations of those efforts, and turn their talents and their influence to another, much more difficult challenge: How to greatly improve the system that educates all the children in this country.